Life assurance

Covers against: Death

Type of benefit paid: Regular income or lump sum

A Term life insurance plan is the most basic form of life insurance and is usually the cheapest way to insure your life. It covers you for a fixed period and pays out a one-off lump sum if you die during the policy term.

This type of plan is designed for those who want to give financial support to another in the event of their death within a specified time period while keeping the cost to a minimum. It can protect your family from the financial implications of a personal tragedy and is particularly important if you have young children or dependents. It can be used to cover a mortgage, other loan or to ensure that your family is protected from the effects of having to repay a debt after the main breadwinner has passed away. As advisors we can help you find the plan that best meets your requirements.

As with all insurance policies, conditions and exclusions will apply.

Critical illness cover

Covers against: Serious illness or injury

Type of benefit paid: Lump sum

This plan is designed to pay out a lump sum on the diagnosis of certain specified illnesses. It is often ‘bolted on’ to a life assurance policy as an additional benefit but can also be a standalone plan.

This type of plan is designed for those individuals or families whom want a lump sum if they are diagnosed with a serious illness.

The quality of cover and the illnesses covered can vary significantly between different providers. As advisers we can help you find the plan that best meets your requirements.

As with all insurance policies, conditions and exclusions will apply.

Business protection

Business Protection aims to reduce the financial impact of death or critical illness affecting key people within your business.

The impact could be a loss of profit, an interruption to cash flow, an inability to make loan repayments or a change in shareholder control.

In some instances, the financial impact could be so great, that the business is unable to continue. Business Protection allows you to put in place cover that would ensure that funds become available, should a key person in your business become critically ill or die.

Income protection

Covers against: Illness or injury

Type of benefit paid: Regular income

An Income Protection plan is designed to pay out a regular income in the event you are unable to work due to an accident or illness. These types of plans continue to pay out an income as long as you are unable to return to work up until the end date of the policy, which is typically your normal retirement age.

This plan can work for anyone who is working either employed or self-employed. It’s worth pointing out that even if your employer provides sick pay, it is unlikely to last for longer than twelve months so ongoing protection is essential.

Plans can be adapted to fit in with any existing protection you might have. As advisors we can help you find the plan that best meets your requirements.

Mortgage payment protection

Covers against: Serious illness or injury

Type of benefit paid: Regular income

A Mortgage Payment Protection plan is designed to ensure that you are able to continue to make your mortgage (and other related expenditure) payments in the event of accident, sickness or unemployment. It is often referred to as Accident, Sickness and Unemployment cover or ASU. These plans usually pay benefits for up to two years however, if you are seeking a plan that pays for a longer period, then Income Protection Insurance is generally more suitable.

It’s worth noting that there is currently no legal requirement to have such cover and potential mis-selling of these products has generated much interest from the media and the industry regulator in recent years. However, this doesn’t mean that they are not right for some people and can provide valuable protection.

It is extremely important that you take financial advice before taking out this type of plan as they are not always the best nor cheapest option.

Mortgage repayment

Accident, Sickness and Unemployment Cover typically costs £4.71 a month for every £100 of monthly benefit. This is based on a 36-year-old customer choosing £850 of accident, sickness and unemployment monthly benefit with claims paid after a 30-day deferred period.

The cost of this insurance depends on a number of factors, such as your age, where you live and your occupation. As a result, the cost you will pay is based on your own circumstances.

There are other providers of Short-Term Income Protection and other products designed to protect you against loss of income. For impartial advice about this type of insurance, please visit the website www.moneyadviceservice.org.uk